Rauna is a small village in Cesis district in Latvia. There are several boiler plants and district
heating networks in Rauna. In one of them there was one log-fired boiler and oil-fired boiler. The
annual energy production for this network was 7000 MWh.

Type of project:a)

fuel switching to renewable

Location (exact, e.g. city, region,

state):

Rauna village

Cesis district

LATVIA

Activity starting date:

9. October (letter of Intent)

In operation from:

March 1996

Expected activity ending date:

Loan expire date 30. September 2005

Stage of activity:b)

Complete

Lifetime of activity if different from ending date:c)

Expected technical lifetime is 15 years which means that the plant is expected to be in operation
till 2011.

Technical data:d)

In this project, a conversion to bio fuel has been made by the installation of a complete new
boiler (1.5 MW) to replace one of the old ones. The installation is made up of a fuel storage with
an automatic fuel handling system, combustion equipment and flue gas cleaning system. Estimated
energy production 7000 MWh/year.

c) Methodological work will be required to define lifetime of activities.

Methodological work will be required to determine for each type of activity what the minimum
data requirements are.

Lifetime of activity

Heat production plants (bio fuel)

25 years

New installation of all main equipment parts (fuel handling system, firing equipment and boiler)
and modernisation of secondary equipment.

15 years

Conversion of existing boiler but new installation fuel handling system and firing equipment.
Modernisation of secondary equipment.

10 years

Limited installation of new equipment (only one part of the three main parts, normally the firing
equipment). Modernisation of other equipment.

Heat distribution systems and sub-stations

25 years

Pre-fabricated pipes and installations using certified contractors and supervisor according to EN
norms and applicable district heating practise

15 years

Pre-fabricated pipes and installations without using certified contractors and supervisor

10 years

Modernisation of existing pipes.

Energy efficiency in buildings

25 years

Additional insulation roofs walls etc. with Scandinavian technology.

New installed heating systems.

15 years

Renovation and balancing of heating systems including thermostat valves.

10 years

Weather stripping windows, doors etc.

* if a combination of measures is done a reasonable lifetime for the project have to be calculated.

4) Cost (to the extent possible):

To the investment costs are referred the cost of the investment proper and the accumulated interest during
the grace period, generally 2 years.

The AIJ/JI cost items are the costs for:

Technical assistance, a technical and administrative support from consultants, during the period from
definition of the project till commissioning. These costs are paid by STEM.

Follow-up, an annual technical and economic follow-up by consultants, hired by STEM, of the operating
results of the plant with the objective to improve on its techno-economic sustainability and its climate
effect. The cost indicated is an average cost per project.

Reporting costs – i e costs in connection with the annual reporting of the project’s
climate effects to UNFCCC. The cost indicated is an average cost per project.

Administration –Costs for seminars, handbooks, education (capacity building) and average costs of
STEM staff per project.

Difference in interest rates. STEM applies for its loans generally an interest rate corresponding to
6-month STIBOR (Stockholm InterBank Rate, in April 1999 3,0 %). Assuming a normal lending rate of 7 % means
that this loan is associated with a cost of 4 % in relation to normal lending rate.

Investment/instalment = the borrower’s possible own financing of the investment, followed by the
borrower’s repayment of the loan.

All costs in USD

Country

Rauna BC

1996

1997

1998

1999

0

1

2

3

Investment

1. Loan/debt to STEM

95750

106625

93250

79931

2. Added costs

0

10875

0

0

3.Technical assistance

31250

0

0

0

AIJ/JI

4. Follow up

0

10625

2750

2834

A. Sweden

costs

5. Reporting costs

0

1063

0

930

6. Administration

50000

0

0

0

7. Difference in interest

4%

4265

3730

3197

8.Accum. costs for AIJ/JI

81250

97203

103683

110643

9.Total costs

177000

203828

196933

190574

Investment

1. Investment/amortization

0

0

13375

13319

Latvia

AIJ/JI

2. Reporting costs

0

0

0

0

3. Other osts

0

0

0

0

costs

4. Accum. costs for AIJ/JI

0

0

0

0

5. Total costs

0

0

13375

26694

1 USD=

8

SEK

5) Mutually agreed assessment procedures:

Describe the procedures, including name of organizations involveda):

It is stated in agreement between STEM and Ministry of Environmental Protection and Regional
Development of the Republic of Latvia that local organisation in Latvia, company EKODOMA is
assigned for the data collection and evaluation of the climate effects of this project. After an
initial work in cooperation with STEM’s assigned consultant, this local organisation would
take the main responsibility the continued measuring for JI-reporting.

a) Please ensure that detailed contact information for all organizations mentioned is reported under

section A.2 above.

B. Governmental acceptance, approval or endorsement

Bearing in mind that all activities implemented jointly under this pilot phase require prior acceptance,
approval or endorsement by the Governments of the Parties participating in these activities, which shall be
shown as follows:

(a) In the case of joint reporting, the report is submitted by the designated national authority of one
participating Party with the concurrence of all other participating Parties as evidenced by attached
letters issued by the relevant national authorities;

(b) In the case of separate reporting, the reports are submitted separately by the designated national
authority of each and every participating Party. Information will only be compiled once reports have been
received from all participating Parties.

1) For the activity:

* Subsequent reports:

Third report. First report was submitted 1997.

2) This report is a joint report:

Yes, Agreement with designated national authority was signed 1997.

3) General short comment by the government(s) if applicable:

Yes, Agreement with Latvian Ministry of Environmental Protection and Regional Development was signed on
March 1999.cf. Annex II, section B

C. Compatibility with and supportiveness of national economic development and socio economic and
environment priorities and strategies

Describe (to the extent possible) how the activity is compatible with and supportive of national
economic development and socio-economic and environment priorities and strategies

The Swedish side considers that the project meets the following objectives in the Latvian Energy
Law:

Latvia became a Party of the United nations Framework Convention on Climate Change (UNFCCC) in
1992.

In accordance with Kyoto Protocol to the UN FCCC on 10 December 1997, Latvia individually or
jointly should ensure, that its aggregate anthropogenic CO2 equivalent emissions of
CO2, CH4, N2O, HFCs, PFCs and SF6 in 2008 - 2012 should
be 8% below the 1990 level.

D. Benefits derived from the activities implemented jointly project

Whenever possible, quantitative information should be provided. Failing that, a qualitative description
should be given. If quantitative information becomes available, it could be submitted using the update(s).
(If the amount of quanttiative information is too large, the source could be indicated.)

Item

Please fill in

Describe environmental benefits in detail:

Annual emissions reduction:

1340 ton CO2

37.0 ton SO2

1.0 ton NOx

Lower pollution.

Better silviculture

Do quantitative data exist for evaluation of environmental benefits?

Yes.

Collected by EKODOMA

Describe social/cultural benefits in detail:

More stable energy supply.

Improved working conditions, increased motivation

Improved trade balance.

Do quantitative data exist for evaluation of social benefits?

No.

Describe economic benefits in detail:

Decreased fuel costs about 3 USD

Do quantitative data exist for evaluation of economic benefits?

Yes.

Collected by EKODOMA

E. Calculation of the contribution of activities implemented jointly projects that bring about real,
measurable and long-term environmental benefits related to the mitigation of climate change that would not
have occurred in the absence of such activities

1) Estimated emissions without the activity (project baseline):

Description of the baseline or reference scenario, including methodologies applied:

Present data reflect emission reductions using status quo (emissions in the period before the conversion to
renewable fuel) for the baseline case. Calculations, according to the top-down method, for emissions from

different types of projects in the baseline case are being made. The changed calculation method will result
in a change in emission reduction. The new data will be introduced as soon as available.

2) Estimated emissions with the activity:

Description of the scenario, including methodologies applied:

Emission reductions are calculated using the IPCC Guidelines, using the Carbon Emission Factor (CEF) for
different types of fuel, using actual system efficiency. For boiler conversion, the decrease in emissions
is calculated in relation to the amount of fossil fuel replaced (status quo). For an energy efficiency
project the decrease in emissions reflects the amount of fuel that is saved through the project. In the
case that the

system uses renewable fuels, the reduction is calculated comparing the amount of fossil fuels that was used
before the conversion to renewable fuels.

The comparison below is based upon that the base-line scenario represents a status quo solution.

Fill in the following tables as applicable:

Summary table: Projected emission reductions:

GHG

Year 1

=1996

Year 2

=1997

Year 3

=1998

Year 4

=1999

...

Year 15

Energy production at plant based upon the baseline (MWh/year)

7000

7000

7000

7000

7000

A) Project baseline scenario

CO2

2400

2400

2400

2400

2400

CH4

N2O

other

B) Project activity scenarioa)

CO2

0

0

0

0

0

CH4

N2O

other

C) Effect ( B-A )

CO2

-2400

-2400

-2400

-2400

-2400

CH4

N2O

Other

D) Cumulative effect

CO2

-2400

-4800

-7200

-9600

-36000

CH4

N2O

Other

a) Includes indirect GHG leakages.

Summary table: Actual emission reductions:

GHG

Year 1

= 1996

Year 2

= 1997

Year 3

=1998

Year 4

=1999

...

Year 15

Factual energy production on biofuels/ saved energy (MWh/year)

5440

5500

5470

3790

5050*

A) Project baseline scenario

CO2

1900

1940

1930

1340

1778*

CH4

N2O

other

B) Project activity scenarioa)

CO2

0

0

0

0

0

CH4

N2O

other

C) Effect ( B-A )

CO2

-1990

-1940

-1930

-1340

-1778

CH4

N2O

Other

D) Cumulative effect

CO2

-1900

-3840

-5770

-7110

-26663

CH4

N2O

Other

* - average figure for previous full years of operation

a) Includes indirect GHG leakages. CO2 emission level is 0 because only produced energy on bio
fuels is taken into account.

F. Additionality to financial obligations of Parties included in Annex II to the Convention within the
framework of the financial mechanism as well as to current official development assistance flows

Please indicate all sources of project funding.

Category of funding

(For each source one line)

Amount

(US dollars)

Loan from NUTEK/STEM

100.000

Grant from NUTEK/STEM for technical assistance

31.250

1 USD = 8,00 SEK

G. Contribution to capacity building, transfer of environmentally sound technologies and know-how to
other Parties, particularly developing country Parties, to enable them to implement the provisions of the
Convention. In this process, the developed country Parties shall support the development and enhancement of
endogenous capacities and technologies of developing country Parties

Transfer of environmentally sound technologies and know-how

Describe briefly

Schematically, the transfer of knowledge involves the following activities over time:

i) Technology transfer through NUTEK/

STEMs technical specialist during the implementation of the project.

ii) Technology transfer through cooperation between foreign supplier and local partner

iii) Conferences, seminars, documentation and training.

iv) Stimulate "net-working" for the exchange of experience between plant owners with
similar problems, e. g. "bio-clubs"

i) technology transfer has taken place through NUTEK

/STEMs technical specialist support to the local project leader and municipality as well as boiler
plant staff.

ii) local companies took part in the project implementation phase - (ground works, building, civil
engineering works), the main contractor for the equipment delivery has been company HOTAB
Eldningsteknik AB (Sweden)

iii) Special training courses for boiler house operators were arranged by the main contractor on
operation/

Staff from the boiler plant has been invited to different seminars and workshops, documentation for
training has been handed over. The following seminars in Latvia have been organized by support from
STEM:

iv) Specialists of other boiler houses have visited the boiler plant, the staff has an exchange of
experience with other boiler plants. Management was active in "bio-club" established in
1994, now is member of Bioenergy Association. Association was founded on December 1998 with the
support from STEM and is aimed to closer relations among the plant owners, municipalities,
equipment suppliers and consultants.

Endogenous capacity supported or enhanced:

Endogenous capacity

(Name of organization1)

Development (DEV) /

enhancement (ENH)

Describe briefly

SIA Orion , SIA Komforts

HOTAB, Kazlu Ruda metalas

Rauna municipality

(DEV)

ENH

A new boiler and pre-furnace has been developed together with NUTEKs consultant ÅF
Energikonsult to implement smaller conversion projects in the Baltic States and Russia

Plant owners got experience in installation and exploitation of modern technology for wood fuel
combustion.

H. Additional comments, if any, including any practical experience gained or technical difficulties,
effects, impacts or other obstacles encountered

Fill in as appropriate:

Any practical experience gained:

Heating company have new modern technology based on wood fuel utilization. Boiler house operators got new
knowledge about burning of wood fuel. It is possible to use different wood fuel: wood-chips, sawdust, as
well as residues from the wood processing companies that was dumped out before project realization. The
costs for the project were lower because of the participation of local companies.

One of the first small scale (1,5 MW) boiler conversion projects in Latvia, that was repeated for other
places. The project is used as demonstration plant.